Why Red Emperor Resources Share Price Jumped Higher Today

What happened to the Red Emperor Resources share price?

At the time of writing, shares of Red Emperor Resources NL [ASX:RMP] are up by 5.71%, to 3.7 cents per share. Red Emperor Resources is an exploration company listed on both the Australian Securities Exchange and Alternative Investment Market [AIM:RMP]. Red Emperor has oil and gas interests on the Alaska North Slope and in South East Asia

Why did Red Emperor Resources share price do this?

The company announced earlier in the week that it, along with its consortium partners (88 Energy [ASX:88E] and Otto Energy [ASX:OEL]), has executed formal ‘Definitive Agreements’ to acquire and drill a large oil prospect on the prolific Alaska North Slope.

What now for Red Emperor Resources?

These leases look the real deal…

The primary drill target lays immediately adjacent to, and offers similar characteristics to, the successful Horseshoe-1/1A oil well drilled in 2017. Horseshoe is part of the billion-barrel plus Nanushuk oil play fairway ― and it’s considered the largest discovery in over three decades in the US. Geologists familiar with the North Slope said the discovery could be a game-changer in Alaska, tapping a long-overlooked, relatively shallow formation.

The ‘Western Blocks’ offers significant untapped potential.

The best news: Red Emperor Resources should own a decent chunk of it:

Source: Red Emperor Resources

The first well is estimated to cost roughly US$15 million (100% dry hole cost), where Red Emperor’s share would be US$5.25 million of the total. The company held AUD$10.4 million in the bank at 30 June. In other words, it should have enough money for its share of the well and the transaction costs associated with it.

Drilling should start early next year.

And if the company taps the mother lode, the share price should explode…

Jason Stevenson is Markets & Money’s resource analyst. He shares over a decade’s worth of investing and trading experience across resource stocks and commodity futures and options.
He originally studied accounting and finance at Curtin University, where he was awarded a first-class honours degree. His professional background stems across high-net-worth, top tier accounting (corporate finance, tax and auditing), and sell-side equities research. Before joining the team at Markets and Money, Jason worked at boutique firms which advised fund managers and high-net-worth clients on where to invest.
Whether it’s gold, crude oil, copper or an obscure metal like vanadium, you can rely on an in-depth analysis in Markets and Money. Jason also brings you extensive macro, political and geopolitical analysis from around the world. He leaves no stone unturned when it comes to telling the truth.
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